Raising a child isn’t cheap. The cost of raising a child from birth to age 18, not including college, was estimated at $226,920 in 2011, according to the U.S. Department of Agriculture. That’s up nearly 40 percent from a decade ago.
Thankfully, you don’t have to come up with that entire amount right now, but eventually you will, so a logical question would certainly be, where does one begin their financial preparation for a new baby?
Saving money is key especially for new expectant families, and as Dad, you want to make sure you’re doing your part to successfully contribute towards the family nest egg. There are many things you can do right away to secure more dollars in your bank account. Many times it only takes a bit of prioritizing in order to build your savings.
Here are five things that you can start right away to impact your savings, and make it financially easier for you and you’re partner once the baby arrives.
Making A Financial Goal: When it comes to creating a financial goal for you and your family, it’s best to be specific on what you would like to financially achieve. For example, it’s better to say “I’d like to have $5,000 set aside before the baby gets here”, as opposed to saying “I’d like to save a good amount of money before the baby gets here.”
Creating a specific dollar amount makes it clearer on what you have to do to save. You and your partner should also make your financial goals known to each other. “Sharing your goals is instrumental because it keeps us accountable and more likely to stay true to them. You can track your goals with a personal blog, a Facebook page, or through a support group”, Financial expert Farnoosh Torabi, and author of the book Psych Yourself Rich, told myfoxny.com.
Eliminate Impulsive Spending: About 6 percent of women and 5.5 percent of men are compulsive shoppers, according to a 2006 study from Stanford University, and the best ways to combat this feeling of retail entitlement is to buy everything with cash for a period. This will allow you to limit what you spontaneously purchase, since you don’t always have cash on you.
When you leave your house, make a conscious decision of how much you will spend for that day and stick to it. If you’re going grocery shopping write a list of what you’ll only need and do your best not to deviate from that list. Avoid shopping channels like QVC, and decide to take a walk or to exercise if you are hit with a sudden impulse to spend money or suddenly shop.
Design a Household Budget: You should take an inventory of all the income that comes into the home, and keep track of all expenses, including bills, debt payments, groceries, and everyday expenses such gas, or public transportation costs. This should be done for a month’s time, and afterward both you and your partner should sit down and decide exactly what in your expenditure list can be removed or cut down on, like eating out so much, or removing some of your cable TV’s movie channels. Besides your individual costs, also discuss how you can reduce overall household expenses, like the electricity, heat, or food bill. Once you have your tally, you can continually put that entire amount into a savings account for when the baby arrives.
Consider A Second Job….At least Temporarily– Working a second job can be difficult, but it will be even more difficult once the baby is here. Working a second job will not only allow you to bulk up your savings account, it can be a portion of money earned that doesn’t have to be touched until you absolutely need it. This extra source of income can be a part time position within a company, or it could be a business that you establish on your own, like tutoring, or dog-walking. Either way, you may not have to keep working a second job once the baby arrives, but while you currently have the time and energy, it’s something you definitely want to think about.
Eliminate the Interest– If you’re able to pay off as many bills as you can, you’ll be able to save money on the interest payments, and also be able to free up additional credit if needed for when the baby comes. Many people don’t actually realize how much money they’re spending on credit interest charges, and if you are continually carrying a large balance, your rates will be increased. The amount that you’ll be able to save in interest charges by paying off your your card bills each month, will significantly contribute to your overall savings.
Another important thing to do is to try and shake off any overwhelmed feelings you may have. It’s very easy to cloud up your sense of logic and rational with worry, so be sure you stay positive about the new changes in your life. As long as you are taking pro-active steps to change some of your spending and ways of earning, there is absolutely no reason that both you and your partner can’t financially prepare for your beautiful family addition.
In an earlier feature entitled What to Expect When Expecting, TheCheckup provided several tips on how to properly plan for a new baby. As part of a continued series surrounding fatherhood, we will supply further insight on many of the common things that can assist fathers in maximizing their father,child, and family experience.